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The Workforce Housing Conundrum

  • Writer: Janine Namgung
    Janine Namgung
  • 4 days ago
  • 2 min read
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Every community depends on its workforce — teachers, nurses, first responders, service professionals. Yet for many, finding a quality home near where they work has become nearly impossible.


Earlier this month, we acquired Fruitland Meadow in partnership with Enterprise Community Investment, Inc., a 168-unit community in Salem, OR, built in 2018. This acquisition preserves affordable homes for families and individuals earning up to 80% of Area Median Income (AMI) in Marion County.



Our success on this transaction relied on three key factors:

  • Aligned capital — a collaborative partner with a discretionary fund focused on preserving workforce housing nationwide.

  • Strong local partnership — collaboration with the Salem Housing Authority to extend a 100% tax abatement, ensuring the property continues serving 80% AMI residents.

  • Compelling economics — acquiring the property at over a 20% discount to its estimated replacement cost.


That last point underscores the challenge we aim to tackle: while demand for workforce housing is undeniable, new projects are tough to pencil.


Construction costs have risen faster than rents, and suitably zoned, level, infrastructure-ready sites are increasingly scarce. The result? Project costs often approximate project values — leaving little incentive for private capital to add new workforce units.



Fruitland Meadow is a case study in this conundrum: purchased below replacement cost yet achieving current 80% AMI rents.


But we believe a scalable solution is within reach. Our analysis shows that if we can reduce as-built costs by 10–15% (depending on location), new projects can become financially viable for private capital — without sacrificing quality or amenities.


We’re seeing interest from capital sources with long-term investment horizons, such as family offices, especially in undersupplied markets where population growth is expected to outpace national trends.


This solution is varied and complex. We are currently working with municipalities on financial and policy concessions. At the same time, we are partnering with general contractors and subcontractors to unlock efficiencies through scale, replication, and design.


Our goal is to both preserve existing workforce housing and develop new 80% AMI communities across key western MSAs — keeping essential workers close to the communities they serve.


We’ve made progress, but there’s much work ahead.


How do you think we can accelerate workforce housing solutions nationwide?  We’d love to hear your ideas below.


 
 
 

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